Silver Doctors

BrotherJohnF remains short term bearish in his latest silver update based on TA and the MACD, but we all know how fast Benny’s inkjet (or helicopter or twister) can make TA irrelevant.

IF The Bernank dissapoints at 2:15pm, then we’ll get a decent sale in silver (and gold and AAPL, and everything else).  If The Bernank exceeds expectations (which are roughly $300-$500 Billion) then you can kiss goodbye the bearish TA.

For those new to the site, we have a tradition here at SilverDoctors. 
We have developed a little animated game called Punt The Bernank, and we bring it back each time The Bernank gives a public speech/ statement.
Today all eyes will be on The Bernank at 2:15pm as the Fed either announces QE3 (or something substantially greater than Operation Twist) or we enter 2008 (for stocks) all over again. 

Punt The Bernank!

Looks Like the Yield on a Tier 1 Asset to You, Right?

Greek 1 year bonds are considered Tier 1 assets, yet gold and silver are considered Tier 2 and are currently in international discussions over whether they should be considered Tier 1.

LOL!

FUBAR.

LBMA campaigns for gold to be Tier 1 asset for banks under Basel III Posted on 20 September 2011
European central banks have become net buyers of gold for the first time in more than two decades, a significant sign that the role of precious metals in currency markets is not only being reassessed but actually changing, reported The Financial Times, while there also is a campaign afoot to include gold as a Tier 1 bank asset with the Basel Committee on Banking Supervision.
This week the London Bullion Market Association is meeting in Montreal, the biggest gold industry conference of the year. China, Mexico, Russia, South Korea and Thailand central banks are also net buyers of the yellow metal.
Tier 1 gold
However, the Basel III initiative is highly significant too because it would trigger a far wider use of gold within the banking system, not quite a return to the gold standard but the next best thing as far as demand for the yellow metal is concerned.
Presently Tier 1 assets include government bonds such as Greek bonds and a widening of Tier 1 to include precious metals is seen as a way of shoring up confidence in the banking sector with assets that do not require official rating because there is zero counter-party risk.
Read more:

Goldman Sachs (also known as the US Treasury Dept) has just released its expectations for tomorrow’s Fed announcement: $300-$400 Billion equivalent 10-year purchases. 

With the FOMC announcement just one day away, the market consensus is that we’re getting Operation Twist. The key question remaining is the size and composition of the twist.
Economists at Goldman Sachs said in a note late Monday that they expect the Fed, in increasing the average maturity of its bond holdings to stimulate the economy, to purchase a net $300-$400 billion in 10-year equivalent debt — i.e., taking on the same amount of duration risk as $300-$400 billion of the current 10-year Treasury note.
Read more:

Brink’s lost 613,130 ounces out of REGISTERED vaults Monday, The Morgue continues to stir with another large deposit into eligible vaults, as well as another eagle pilfered by the janitor to report from today’s COMEX warehouse silver inventory update.

COMEX SILVER WAREHOUSE INVENTORY REPORT 9/20/2011

*Brink’s saw a massive withdrawal of 613,130 ounces of REGISTERED PHYZZ
*Brink’s also had a withdrawal of 45,382 ounces from eligible vaults
*Brink’s received a deposit of 600,497 ounces into eligible vaults

*The Delaware Depository received a small deposit of 966 ounces into eligible vaults

*No changes for HSBC

*JP Morgan received a large deposit of 303,353 ounces into eligible vaults
*JP Morgan lost another silver eagle to the janitor, as it also reported an adjustment of 1 ounce out of the eligible category

*Scotia Mocotta received a deposit of 372,986 ounces into eligible vaults
*Scotia Mocotta also had a withdrawal of 71,668 ounces out of eligible vaults

*TOTAL COMEX REGISTERED SILVER declined by 613,130 ounces to 31,141,776 ounces
*TOTAL COMEX ELIGIBLE SILVER increased to 74,110,418 ounces
*TOTAL COMEX WAREHOUSE Inventory increased to 105,252,194 ounces

A month ago, Hugo Chavez shocked the international bankster community by demanding the return of Venezuela’s gold held abroad in cartel vaults in London and New York, and also nationalizing Venezuela’s gold industry.
Apparently Chavez is serious about his PHYZZ. 
On Monday, Chavez upped the ante, BANNING ALL GOLD EXPORTS FROM VENEZUELA.

Its unclear whether this extends to capital controls, or just applies to mined gold.

Venezuela will extend its nationalization movement by banning the export of gold out of its country.  On Monday, new guidelines laid out by the Official Gazette said, ” All gold that is obtained through mining activity within national territory will be handed over to the Bolivarian Republic of Venezuela.
 The government will have a monopoly of production and sales.”

The decree also states that the government will hold at least 55% of any joint ventures, and sets a royalty rate of 10% to 13%.  The rate could fall to as low as 3% for small community based operations in the country’s southeast region. Companies will have 90 days to form joint ventures and all gold production will be sold to the state.

In order to enforce the gold nationalization, Venezuela will establish military zones using the National Guard to reduce illegal mining operations.  In May, Hugo Chavez claimed that Venezuela produces 11 metric tons of gold a year, but illegal miners extract another 10 to 11 tons a year.
Read more:

US Silver Eagle sales have surpassed 30 million for 2011, and we’re only half-way through September.
Total US Silver Eagle sales for 2010 set a record of 34.6 million ounces, and US eagle sales remain on pace for nearly 40 million ounces in 2011!

Any cartel raid back into the mid $30′s will only increase sales (see January 2011′s sales for exhibit A, and May’s sales for exhibit B) as silver investors continue to scoop up eagles as fast as the US Mint can churn them out (with the San Francisco mint now online to help boost production)

A reader submitted the following letter found in the comments section of Turd’s site, and as we are still smiling nearly 10 minutes after reading, we felt our readers would enjoy it as well.

Check out the response from Cash4Gold after apparently someone sent in gold painted rocks 3 TIMES and requested payment from Cash4Gold of $1.4 Million. 

Maybe for the next practical joke he should try gold painted tungsten.

P.S. This makes us want to prank JP Morgan. 

Bloomberg has conducted a cartel survey of the future of gold at the LBMA annual conference.

SURVEY SAYS:

Gold to peak next year at $2,268. 
LOL!
If only it were that easy…..

Gold will probably top $2,000 an ounce by year-end amid surging investor demand, a Bloomberg survey showed.
Prices will rise to a peak of $2,038 before Dec. 31, based on the average of 16 respondents in a Bloomberg survey at the London Bullion Market Association’s annual conference in Montreal. Next year, gold will rally as high as $2,268, according to the average in the survey.

Read more:

The shorts are in for a world of hurt as the silver miners begin issuing DIVIDENDS.
First Majestic (AG) also has plans to begin a dividend in Q1 of 2012.

COEUR D’ALENE, Idaho–(BUSINESS WIRE)– Hecla Mining Company (“Hecla”)(NYSE:HL) is very pleased to announce that its Board of Directors has adopted a common stock dividend policy that links dividend payments to Hecla’s average quarterly realized silver price in the preceding quarter.


The initial quarterly dividend under the policy is expected to be $0.03 per share of common stock ($0.12 per year), if Hecla’s average realized silver price for the third quarter is $40.00 per ounce. All dividends, including those in the third quarter, would increase or decrease by $0.01 per share ($0.04 annually) for each $5.00 per ounce incremental increase or decrease in the average realized silver price in the preceding quarter. Subject to Board approval, it is expected that the initial quarterly dividend under this policy will be declared and payable before the end of the fourth quarter and will be based on average realized silver prices during the third quarter 2011. The table below provides an overview of the new dividend policy.

“Our Board’s action to adopt this dividend policy reflects our strong operating performance and high silver margins, each of which has strengthened our financial and liquidity position,” said Hecla’s President and Chief Executive Officer, Phillips S. Baker, Jr. “This policy allows us to continue to invest in projects that are expected to grow silver production by 50% in the next five years, evaluate external growth opportunities, continue to strengthen our balance sheet, and now provide cash returns to stockholders.”
Hecla has a strong balance sheet with $377 million in cash and cash equivalents as of June 30, 2011 and no debt. In addition, the Company also has low cash costs and excellent silver margins. During the first half of 2011, Hecla generated $127 million of operating cash flow. Hecla has sufficient cash on hand to fulfill our settlement obligations, meet all capital, pre-development, and exploration requirements for 2011, and pursue other value generating initiatives for our shareholders.
The declaration and payment of dividends remains at the sole discretion of the Board of Directors and will depend on Hecla’s financial results, cash requirements (including for preferred dividends, operations, capital projects, exploration and development, litigation and settlements, acquisitions, and other items), future prospects and other factors deemed relevant by the Board. Investors are cautioned that this new policy is not a guarantee that a dividend will be declared or paid in any particular period in the future.
Visit Hecla’s new website at www.hecla-mining.com which includes more in-depth information about the company, our people, our properties, interesting historical and silver facts, social responsibility initiatives and accomplishments, and a detailed investor section.
ABOUT HECLA
Established in 1891, Hecla Mining Company is the largest and lowest cash cost silver producer in the U.S. The company has two operating mines and exploration properties in four world-class silver mining districts in the U.S. and Mexico.
Cautionary Statements
Statements made which are not historical facts, such as strategies, plans, anticipated payments, litigation outcome (including settlement negotiations), production, sales of assets, exploration results and plans, costs, and prices or sales performance are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking statements. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, environmental and litigation risks, operating risks, project development risks, political risks, labor issues, ability to raise financing and exploration risks and results. Refer to the company’s Form 10-K and 10-Q reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.
For further information, please contact:

Hecla Mining Company
Vice President – Investor Relations
Mélanie Hennessey, 604-694-7729
Direct Main: 800-HECLA91 (800-432-5291)
hmc-info@hecla-mining.com
www.hecla-mining.com

Gold is up this morning as credit rating agency Standard and Poor’s doused cold water over Italy’s capacity to address their public finances.  It would seem that through poor management a dysfunctional political class has done too little too late to address the worsening Italian balance sheet.  As in many other countries faced with severe austerity measures, Italy’s government has underpinned its austerity plan with rosy growth predictions.

From Goldcore:

Gold is trading at USD 1,793.84, EUR 1,309.37, GBP 1,140.96, JPY 137,101.40, AUD 1,742.44 and CHF 1,577.91 per ounce.
Gold’s London AM fix this morning was USD 1,792, EUR 1,309.37, and GBP 1,142.27 per ounce.
Yesterday’s AM fix was USD 1,817, EUR 1,332.31, and GBP 1,155.56 per ounce.

The S&P report states…
The lowering of the long- and short-term sovereign credit ratings on Italy reflects our view of the Italian economy’s weakening growth prospects and our view that Italy’s fragile governing coalition and policy differences within parliament will likely continue to limit the government’s ability to respond decisively to domestic and external macroeconomic challenges.
It then gives three reasons why they will miss their targets for growth:
…. we think that the government’s projection of a €60 billion savings may not come to fruition for three primary reasons:
• First, as described below, we view Italy’s economic growth prospects as weakening;
• Second, nearly two-thirds of the projected budgetary savings in the crucial 2011-2014 period rely on revenue increases in a country already carrying a high tax burden; and
• Third, market interest rates are anticipated to rise.

The Economist – June 11-17th 2011
Italy may be the butt of many international jokes due to the excesses of its political class but its economy is enormous and essential to the eurozone ecnomic integrity.  With debt levels now at 135% of GDP (Global Finance – Public Debt by Country), it is in danger of going down the same road as Greece, (debt-to-GDP 139%).  A crisis here may be too much for the eurozone to handle and may predicate a pan-European restructuring of the euro with global consequences that are potentially staggering.
From the London Bullion Market Association conference, a Bloomberg survey reports that gold could top $2,000 an ounce this year on the back of investor demand and risk aversion with a further 10% in 2012.  No one knows for sure where the gold price will go but as long as governments cower from their responsibilities to balance their budgets and continue to print money instead of paying their bills, gold will likely appreciate in paper money terms.
For the latest news and commentary please follow us on Twitter.
SILVER
Silver is trading at $39.45/oz, €28.83/oz and £25.14/oz.
PLATINUM GROUP METALS
Platinum is trading at $1,778/oz, palladium at $713/oz and rhodium at $1,750/oz.
NEWS
(Reuters) 
S&P Italy downgrade new blow for distressed Europe
(Bloomberg)
Chavez Decrees Nationalization of Gold Industry Amid Surging Bullion Price
COMMENTARY
(Reuters)
Analysis – Gold loses lustre as Europe woes boost dollar appeal
(MarketWatch)
Gold inclusion as Tier 1 asset would be huge: LBMA

The Swiss are attempting to overrule the Swiss National Bank’s CHF devaluation by passing a Consitutional amendment making gold sales by the SNB illegal, and requiring 20% of the SNB’s assets to be held in gold. As the SNB currently holds 16%, this would present a slight problem for the banksters if passed.

Through Google Translate:

After the gold sales in recent years, the Swiss National Bank has a little more than 1000 tons of gold. With its people’s initiative “Save our Swiss gold” (gold) initiative, the SVP wants to ensure that it remains so.
The party wants to enshrine a people’s initiative in the Constitution that the gold of the National Bank (SNB) may no longer be sold. The remaining gold reserves are stored in Switzerland. With an assumption of the initiative, the SNB would also obliged to keep 20 percent of their assets in gold. In its annual report 2010, the SNB made 16 percent of their assets in gold.

The SVP criticism that the SNB has sold in the last ten years, more than half its gold reserves. If the more than 1,500 tonnes exists, Switzerland would now have extra reserves of 75 billion francs, the Aargau National Luzi Stamm said on Tuesday in front of the media Bern.Population not previously asked
The gold reserves were under pressure from abroad, but also upon the recommendation of Swiss experts who had called the gold reserves as superfluous sold. The Swiss population, however, was never asked if the gold should be sold, although that is a question of “national wealth,” said Stamm.
“National wealth” question, because in the gold reserves “of hard work, the ingenuity, the pioneering spirit, commitment and performance power of every people” Spiegler said National Ulrich Schlüer (Zurich) according to the transcript. No government is legitimate, to dispose of the currency reserves of the country’s own easy. “Can that politicians on the world stage to play poker” These were not made, said Schlüer.
The St. Gallen National Reimann Lukas sees the gold reserves of the foundation for the capabilities and independence of Switzerland. The solution for the currency and debt crisis can only be: “Back to sound, to real, visible and tangible values ​​oriented monetary policy,” said Reimann.Switzerland’s future
The gold reserves of the National Bank formed a foundation of trust, which for a sound currency and thus the stability of the financial sector was essential. No less important, as Reimann but the storage area of ​​the gold. Namely, a portion of the reserves stored abroad, which holds the initiative committee in view of the indebtedness of many countries is irresponsible.
According to Reimann is the gold-initiative “in the face of difficult and uncertain times” therefore of crucial importance for the future of Switzerland. With the petition, the SVP can begin now. She has until 20 March 2013 period, which have together for the realization of their desires necessary 100,000 signatures. This period was published on Tuesday in the “Federal Gazette”.

Read more:

“Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in breadstuffs of the country. When you won, you divided the profits among yourselves, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out and by the Eternal God, I will rout you out.”

-Andrew Jackson in response to the banksters’ attempt to renew the original 20 year charter of the Second Bank of the United States in 1832.

Activity heating up in The Morgue’s silver warehouse, with a large deposit and withdrawal to report from Friday’s COMEX warehouse inventory movements.

COMEX WAREHOUSE SILVER INVENTORY UPDATE 9/19/11

*Brink’s & HSBC had NO CHANGES

*The Delaware Depository had a withdrawal of 10,934 ounces out of eligible vaults

*JP Morgan received a deposit of 303,351 ounces into eligible vaults
*JP Morgan also had a large withdrawal of 384,201 ounces out of eligible vaults

*Scotia Mocotta adjusted 39,681 ounces out of eligible vaults and into registered vaults

*TOTAL COMEX REGISTERED Silver increased by 39,681 to 31,754,906 ounces
*TOTAL COMEX ELIGIBLE Silver declined to 72,949,667 ounces
*TOTAL COMEX Warehouse Silver inventories declined to 104,704,573 ounces